GOVERNMENT OPERATIONS AND AUDIT COMMITTEE
90th Meeting, LCR 2
2001 Interim, State Capitol Building
Tuesday, May 22, 2001, Pierre, South Dakota
The 90th meeting of the Government Operations and Audit Committee (GOAC) was held in LCR 2 at the State Capitol Building, Pierre, South Dakota, on May 22, 2001, beginning at 8:00 a.m.
Committee members in attendance were Senator Marguerite Kleven, Chair; Representative Gordon Pederson, Vice-Chair; Representatives Quinten Burg, Margaret Gillespie, Claire Konold and Hal Wick.
Marty Guindon, Auditor General, Richard Hornak, Audit Manager, and Gary Hoscheid, Audit Manager, represented the Department of Legislative Audit. Annie Mertz, Senior Fiscal Analyst, represented the Legislative Research Council.
Others in attendance were Monte Kramer, Board of Regents
The meeting was called to order by Senator Kleven.
Representative Konold moved that the committee agenda be approved. Representative Wick seconded the motion, which prevailed on a voice vote.
Senator Kleven moved that the Committee minutes of the December 5, 2000 meeting be approved. Representative Konold seconded the motion, which prevailed on a voice vote.
South Dakota State Cement Plant
Mr. Guindon provided the committee with the process that will be followed to conduct an audit of the South Dakota State Cement Plant Operating Fund (SDCP). The Department of Legislative Audit (DLA) has been requested by a legislator to perform an audit on the SDCP and to provide answers to specific questions regarding the sale of the SDCP. The Executive Board of the Legislative Research Council, at it April 16, 2001 meeting, concluded that the Auditor General should not expend time and effort to answer the thirty one questions submitted by Representative Napoli, but proceed with the process of securing an independent auditor to conduct a financial audit of the State Cement Plant.
DLA has approved a public accounting firm that will conduct the audit and provided input on the scope of the audit. The audit will include all financial activity of the SDCP during the period stated above and the financial transactions relating to the sale of the SDCP. DLA will review the working papers that support the audit and approve the final audit report. DLA will perform an audit of all financial activity of the South Dakota Cement Commission that transpires after March 15, 2001.
The South Dakota State Cement Plant Retirement Fund was not included in the sale of the SDCP. DLA will continue to audit the Retirement Fund.
The committee requested DLA provide information on who receives the interest earned on the $10 million escrow account and how often the interest is distributed.
Department of Corrections-Health Care
Ms. Annie Mertz, Legislative Research Council, provided a news release and an interim appropriations request that addressed the change in health care providers from a contractual relationship with a private health care provider to the state providing health care services.
South Dakota Single Audit Report
Rich Hornak presented an overview of the fiscal year 2000 financial statements for the State of South Dakota and responded to committee questions.
Gary Hoscheid and Rich Hornak presented audit findings and recommendations resulting from fiscal year 2000 audits of state agencies. The committee took the following actions:
Office of the Governor and Office of Attorney General
Representative Burg moved that a letter be sent requesting a status report on implementing the audit recommendation and encouraging implementation of the audit recommendation. Representative Wick seconded the motion, which prevailed on a voice vote.
Governor?s Office of Economic Development
Representative Burg moved that a letter be sent encouraging implementation of the audit recommendation. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Department of Revenue
Representative Burg moved that a letter be sent encouraging implementation of the audit recommendation. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Department of Agriculture
Representative Konold moved that a letter be sent encouraging implementation of the audit recommendation. Representative Burg seconded the motion, which prevailed unanimously on a voice vote.
Department of Agriculture
South Dakota State Fair
Representative Wick moved that a letter be sent encouraging implementation of the audit recommendation along with a request that the State Fair Commission develop a business plan showing how they plan to provide sufficient resources to meet current and future financial operating needs. The plan should be submitted to the Auditor General in time for the next Government Operations and Audit Committee meeting. A copy of this letter should be sent to the Secretary of the Department of Agriculture and the co-chairs of the Appropriations Committee. Representative Pederson seconded the motion, which prevailed unanimously on a voice vote.
Department of Social Services
Representative Burg moved that a letter be sent encouraging implementation of the audit recommendation. Representative Konold seconded the motion, which prevailed unanimously on a voice vote.
The committee requested the Department of Legislative Audit verify that the ACCESS IVD system enhancements were made to correct reported deficiencies in completing the OSCE 34A report and that proper reconciliations are being performed. This information should be provided at the committee?s next meeting.
Department of Health
Representative Konold moved that a letter be sent encouraging implementation of the audit recommendation. Representative Pederson seconded the motion, which prevailed unanimously on a voice vote.
Department of Education and Cultural Affairs
Representative Burg moved that a letter be sent encouraging implementation of the audit recommendation. Representative Konold seconded the motion, which prevailed unanimously on a voice vote.
Department of Commerce and Regulation
Board of Medical and Osteopathic Examiners
Representative Konold moved that a letter be sent stating that no further action is necessary at this time. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Department of Commerce and Regulation
Electrical Commission
Representative Pederson moved that a letter be sent stating that no further action is necessary at this time. Representative Konold seconded the motion, which prevailed unanimously on a voice vote.
Department of Commerce and Regulation
Board of Nursing
Representative Burg moved that a letter be sent noting that the finding on loan records has been reported in the last three audits and requests a response regarding the plans that have been initiated to implement the recommendation. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Public Utilities Commission
One Call Notification Board
Representative Konold moved that a letter be sent encouraging the Board to cooperate with other states to obtain a Statement on Auditing Standards (SAS) 70 report from One Call Systems, Inc. and that the Board provide the committee with the current status of implementing the audit recommendation. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Board of Regents
Dakota State University
Representative Wick moved that a letter be sent stating that no further action is necessary at this time. Representative Burg seconded the motion, which prevailed unanimously on a voice vote.
Department of Military and Veterans Affairs
Representative Konold moved that a letter be sent stating that no further action is necessary at this time. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Office of Attorney General
Representative Wick moved that a letter be sent encouraging implementation of the audit recommendation. Representative Konold seconded the motion, which prevailed unanimously on a voice vote.
Department of School and Public Lands
Representative Konold moved that a letter be sent stating that no further action is necessary at this time. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
University Fiscal Reviews
Gary Hoscheid presented a background on University Fiscal Reviews prepared in prior years. The committee directed that these reviews be discontinued for future years.
Rich Hornak presented the results of a review conducted on the use of state sponsored credit/purchasing cards and on a review of federal tax identification numbers used by state agencies.
Representative Pederson moved that the committee meeting adjourn. Representative Wick seconded the motion, which prevailed unanimously on a voice vote.
Chair Kleven adjourned the meeting at 12:30 p.m.